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Tony Abbott, who came to office last year, is an outspoken monarchist

Australia is to reintroduce the appointment of knights and dames after discontinuing the honour in 1986.

Prime Minister Tony Abbott said that up to four knights and dames would be appointed each year on the Order of Australia honours list.

He said it would only go to those of "extraordinary and pre-eminent achievement and merit".

Opposition politicians questioned the move and said the government's priority should be on creating jobs.

The first to receive the award will be the outgoing Governor-General, the Queen's representative in Australia, who will be known as Dame Quentin Bryce.

Incoming Governor-General Peter Cosgrove and all future holders of the post will also receive the honour.

"It is fitting that the Queen's representative be so honoured," said Mr Abbott.

"It is my intention that the award should only go to those that have accepted rather than sought office and who can never, by virtue of the office they have held, entirely return to public life."

Australia's new knights and dames will be appointed by the Queen on the recommendation of the Australian government.

The honour has been reintroduced into Australian before - in 1976 - only to be scrapped by Bob Hawke's Labor government the following decade.

"Even the arch-monarchist (prime minister) John Howard did not bring back knights and dames," said Shadow Attorney-General Mark Dreyfus, one of a number of opposition politicians who portrayed the move as regressive.

The Labor party leader, Bill Shorten, questioned the government's priorities, saying it should focus on jobs, health and education.

Representatives of Australia's republican movement said the new honours turned the clock back to a colonial frame of mind that Australia had outgrown as a nation.

Supporters of the monarchy, on the other hand, warmly welcomed the decision.

Mr Abbott, who came to office last year, said the change would introduce an important grace note in national life.